Guide to Making a Solid Lease Agreement for Your Rental Property
Having a solid lease agreement is important when you own a rental property. This document will outline your tenants’ responsibilities and can protect you if conflicts ever arise. Preparing a lease agreement before allowing a tenant to occupy your rental property can reduce stress and guides both landlords and tenants on their rights and responsibilities.
A solid lease should contain clear and specific terms and conditions. You should also make sure that your and your tenants’ signatures appear on the document to signify mutual understanding. The leasing agreement outlines not only the duties of the parties but also the clauses, property policies and disclosures required by the state.
With a proper lease in place, renters can rely on it to guide them on what to do in particular scenarios while renting. For example, if they want to make a property maintenance request, they can check the process on the lease. They’ll also find the different acceptable modes of payment if they’re looking for other convenient ways to pay their monthly rent.
How to Create a Lease
There are a few ways for landlords to craft a lease agreement but one of the most hassle-free approaches is to hire a property management company to do it. A property manager will have a deep understanding of the local laws and regulations and knowledge on the industry. They’re also used to creating leases for different clients. On top of that, the cost is generally much lower than paying for a lawyer’s services.
Another upside of hiring a property management company is that creating leases is usually part of their service package which also includes valuable services like marketing, tenant screening, rent collection, and property maintenance and repair. You can contact the experts at Freedom House Property Management today to learn more about the services we offer.
The Purpose of a Lease Agreement
As stated earlier, leases offer protection to landlords. They can also save landlords time since renters can check the agreement before calling to ask questions. You can also help your rental unit stay in good condition with clear-cut maintenance policies laid out in the contract.
Aside from that, relying on verbal agreements can backfire because they can easily be ignored or forgotten. It’s also important to have written and signed documentation in case there are ever issues with tenants. Having a solid lease helps to prevent future misunderstandings since it presents detailed information about the tenancy.
The Basics of a Lease
Although some leases might be different from others, there are some common things that should be included, such as:
- Names of the landlord and tenant(s): The complete names of the landlord and renter(s) must appear on the document.
- Rental unit’s name and address: The full rental property name and specific address must be included in the lease. Even if you’re renting out an apartment unit, the door number must be indicated for clarity.
- Rent due date: To avoid conflicts, it’s best to specify the first day that rent is due and how often it will be due after that. This way renters can be aware and can keep track of the rent payment deadlines to avoid late fees.
- Rent amount: The total monthly rent amount should also be included in the lease. It’s recommended practice to place other fees such as pet fees or security deposits in another category to limit confusion. Note that you can’t require a pet deposit for service animals.
- Tenancy duration: The timeframe of the rental period must be clear and specific. For example, the term of rental stay is from June 1, 2023 to May 31, 2024. This is clearer than just writing the rental period as one year or six months. This prevents issues of overstaying since the end period of tenancy is directly stated.
- Signatures of both parties: The signatures of both the landlord and renter(s) need to be on the document. It informs everyone that the terms and conditions are mutually agreed upon. Adding the date should also be part of the lease signing.
What Clauses and Policies to Include in a Lease
Though leases can be diverse when it comes to terms and conditions, there are certain clauses that should be included. You may be required to include specific clauses as per Nevada landlord-tenant law, so for help, contact a real estate expert at Freedom House Property Management.
Here are some clauses and policies you should include in the lease or rental agreement:
- Subletting: If you decide to allow your tenants to sublet your rental property, you can ask the renter to submit a written request first prior to allowing new residents in the unit.
- Property access: Since your tenant has a right to privacy and quiet enjoyment, you can’t enter the rental premises anytime you want. Entry is only allowed for specific reasons and notice must first be given to the renter. In Nevada, this notice period is at least 24 hours.
- Tenant obligations: Though it seems like landlords bear the heavy responsibility to maintain the upkeep of the rental, renters are also accountable and must do their share to maintain the property. Among these responsibilities are throwing the trash properly and reporting property damage to the landlord.
- Security deposit: It’s good practice to offer detailed information to the renter including the security deposit refund process so renters know what to expect when their tenancy ends.
Any landlord who wants to reduce their stress should prioritize drafting a detailed and solid lease agreement. It can help you avoid arguments with your renters and protect your landlord-tenant relationship. The more specific and clear your lease is, the easier it will be to have a positive relationship with your renters.
You can also consider hiring a trusted property manager like Freedom House Property Management to take care of lease drafting so you can focus more on growing your property portfolio. Contact us today!
For more information on lease agreements, listen to our property manager Scott Smith discuss the importance of reviewing and signing residential lease agreements.